Mitogenic stimulation of cells induces rapid and transient activation of MAP kinases. Previously we have identified PAC1 as an immediate early, mitogen-inducible, tyrosine phosphatase in nuclei of T cells. Recently, we have shown that PAC1 is a dual specificity phosphatase that dephosphorylates and inactivates the MAP kinase ERK2 in vitro and in vivo. PAC1 RNA and protein are short-lived, and it appears that controlling the transcription of PAC1 is a major form of its regulation, although the possibility of post-translational regulation is currently being investigated. Thus, the induction of an early response gene, PAC1, results in the feed back attenuation of a primary signalling pathway. We have used tetracycline-inducible PAC1 expression in 3T3 cells to show that PDGF-mediated growth requires ERK2 activation. PAC1 expression is limited to hematopoietic cells. PAC1 is related to a serum-inducible gene, 3CH134, that has recently been shown to encode a MAP kinase phosphatase expressed in non-hematopoietic cells. In addition to PAC1 and 3CH134, we have cloned a 39 kD phosphatase, MKP-X, from activated T cells. MKP-X contains a C-terminal catalytic domain highly related to PAC1 and 3CH134, and a relatively unique N-terminal domain which may be regulatory in nature. MKP-X is an ERK2 phosphatase. The specificity of PAC1, MKP-1, and MKP-X for ERK2 and the related kinases JNK and HOG have shown that MKP-1 has the broadest specificity and PAC1 the most restricted specificity.